Kurer under siege: that’s what you’re really up against

Citing the nomination of UBS general counsel Peter Kurer as chairman, Legal Week noted that the credit crunch would push lawyers centre stage to help stabilise battered institutions. But the flipside is that such trends would be short-lived, as the international business community’s relentlessly negative view about lawyers in executive and senior governance roles would swiftly reassert itself, reversing any gains.

And short-lived it proved. By the time the comment had been published on Thursday, a substantial campaign against UBS’ strategy in general and Kurer’s nomination in particular was under way.

The most serious element of this is an open challenge from former UBS chief executive Luqman Arnold, who, through his investment vehicle Olivant, has built-up a £200m-plus stake in the bank and is seeking a sweeping shake-up of the bank’s governance. Arnold, in a letter widely reported today, explicitly criticises the appointment of a lawyer to chairman in place of the deposed Marcel Ospel.

The letter argues that Kurer’s appointment “does not bode well” for improving the bank’s governance. Arnold goes on to claim that the 58-year old Swiss lawyer “lacks precisely those skills most relevant” and calls for an “outstanding Swiss banker” to take the role (though it was a celebrated Swiss banker in the shape of Ospel who presided over UBS getting itself into this mess).

Likewise, a prominent Swiss pension fund, a breed not known for outspoken shareholder activism, has gone on the record to criticise Kurer’s nomination, with one trustee quoted as saying that “lawyers are advisers and staff people, but not suitable to lead a bank”.

Elsewhere, Kurer’s nomination has been written up by pundits as a stopgap measure at best, while The Times disapprovingly noted this week that the last in-house lawyer to lead a major bank was Sandy Weill at Citigroup. At this rate, Kurer’s confirmation by shareholders as chairman, which is scheduled for 23 April, cannot be taken for granted.

That UBS - which, despite being a titan of Switzerland’s famously conservative banking sector, should prove to be the worst-afflicted bank from sub-prime write-downs - should see its strategy come in for a mauling is unsurprising. But it seems awfully telling that Kurer’s elevation should be so strongly opposed for no other reason than that he is a lawyer. After all, with UBS facing likely litigation and major governance challenges, a highly experienced banking and M&A lawyer doesn’t seem that ill-suited to the role.

I wouldn’t claim any great insight into whether Kurer is the right man to become chairman. But I heard him speak at a Legal Week conference last year and he certainly comes across as a highly capable man with a jaded view of the excesses of international banking (and international lawyering for that matter), which seems entirely suited to the current situation. He was also during his pre-UBS career at Homburger and Baker & McKenzie one of the country’s top transactional lawyers.

Kurer’s critical drubbing also contrasts with the treatment of other senior figures at rivals in recent months, where a string of bank heads have royally messed up their proud institutions, only to see the pundits conclude that you need, er, more bankers.

Unfair? Perhaps, but it seems this prejudice about lawyers in business - as highlighted by this week's comment piece from Nabarro senior partner Simon Johnston - is getting stale. How long before the profession actually does something about it?

alex.novarese@legalweek.com